EU Eliminates Small Value Exemption: Compliance Guide for Cross-Border Brands
With the EU abolishing the exemption for packages below €150, cross-border brands must ensure accurate product data classification. Declaration through the IOSS system is crucial for ensuring smooth customs clearance. Sellers need to clarify tariff costs at checkout to avoid additional fees post-arrival that could lead to customer refusals.
What are the key facts?
- 1Policy change: Elimination of the €150 duty exemption
- 2New regulation: €3 fixed duty per tax number
- 3Key tool: IOSS declaration system
What happened?
Starting July 1, the EU has eliminated the duty exemption for imported packages valued below €150. Instead, a temporary fixed duty of €3 per tax number has been introduced. For packages declared through the IOSS system, sellers are required to pre-collect VAT and duties at checkout. If there is a lack of effective IOSS registration and accurate H7 declarations, packages will face complex standard tariff classification processes, leading to customs clearance delays. Therefore, sellers need to enhance their understanding of new regulations when handling cross-border transactions to ensure compliance and avoid economic losses and customer complaints.
What does this mean for cross-border sellers?
Sellers need to update their checkout systems to ensure they can automatically calculate and pre-collect EU tariffs, avoiding conversion rate impacts due to cost opacity. Especially after the new policy implementation, timeliness and compliance difficulties will increase, neglecting which could lead to customer loss. Most pressing action: Immediately assess and update systems to meet new regulatory requirements.